Solution Manual for Managerial Accounting,
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18th Edition yu
By Ray Garrison, Eric Noreen and Peter Brewer
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Verified Chapter's 1 - 16 | Complete
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,Table of Contentsyu yu
Chapter One: Managerial Accounting and Cost Concepts
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Chapter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job-Order Costing: Cost Flows and External Reporting
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Chapter Four: Process Costing
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Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Management
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Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
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Chapter Eight: Master Budgeting
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Chapter Nine: Flexible Budgets and Performance Analysis
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Chapter Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems
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Chapter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making
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Chapter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement of Cash Flows
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Chapter Sixteen: Financial Statement Analysis
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,Chapter 1 yu
Managerial Accounting and Cost Concepts yu yu yu yu
Questions
1-1 The three major types of product costs yu yu yu yu yu yu yu 1-4
in a manufacturing company are direct materia
yu yu yu yu yu yu a. Variable cost: The variable cost per unit is yu yu yu yu yu yu yu yu
ls, direct labor, and manufacturing overhead.
yu yu yu yu yu constant, but total variable cost changes in yu yu yu yu yu yu yu
direct proportion to changes in volume.
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1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part of a yu yu yu yu yu yu yu yu within the relevant range. The average fixed
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finished product and their costs can be convenyu yu yu yu yu yu yu cost per unit varies inversely with changes
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iently traced to it. yu yu yu in volume. yu
b. Indirect materials are generally small ite yu yu yu yu yu c. Mixed cost: A mixed cost contains both
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ms of material such as glue and nails. They may
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ube an integral part of a finished product but their
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costs can be traced to the product only at great
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cost or inconvenience.
yu yu yu a. Unit fixed costs decrease as the activity level
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c. Direct labor consists of labor costs that yu yu yu yu yu yu yu increases.
can be easily traced to particular products.
yu yu yu yu yu yu b. Unit variable costs remain constant as the
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Direct labor is also called ―touch labor.‖
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d. Indirect labor consists of the labor costs yu yu yu yu yu yu y c. Total fixed costs remain constant as the
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uof janitors, supervisors, materials handlers, and
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uother factory workers that cannot be convenie
yu yu yu yu yu yu d. Total variable costs increase as the activity
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ntly traced to particular products. These labor
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costs are incurred to support production, but t
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he workers involved do not directly work on th
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e product.
yu a. Cost behavior: Cost behavior refers to the
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e. Manufacturing overhead includes all man yu yu yu yu way in which costs change in response to
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ufacturing costs except direct materials and dire yu yu yu yu yu yu changes in a measure of activity such as s yu yu yu yu yu yu yu yu
ct labor. Consequently, manufacturing overhead
yu yu yu yu ales volume, production volume, or orders p
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includes indirect materials and indirect labor as
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well as other manufacturing costs.
yu yu yu yu b. Relevant range: The relevant range is the yu yu yu yu yu yu y
range of activity within which assumptions
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1-3 about variable and fixed cost behavior are
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A product cost is any cost involved in p yu yu yu yu yu yu yu yu valid.
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urchasing or manufacturing goods. In the case yu yu yu yu yu yu yu
of manufactured goods, these costs consist of d
yu yu yu yu yu yu yu 1-7 An activity base is a measure of wha
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irect materials, direct labor, and manufacturing o
yu yu yu yu yu yu tever causes the incurrence of a variable cost
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verhead. A period cost is a cost that is taken dir yu yu yu yu yu yu yu yu yu yu . Examples of activity bases include units pro
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ectly to the income statement as an expense in
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the period in which it is incurred.
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ade, etc.
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1-8 The linear assumption is reasonably vali
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, d providing that the cost formula is used only w
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ithin the relevant range.
yu yu yu
yu yu yu yu
18th Edition yu
By Ray Garrison, Eric Noreen and Peter Brewer
yu yu yu yu yu yu yu
Verified Chapter's 1 - 16 | Complete
yu yu yu yu yu yu
,Table of Contentsyu yu
Chapter One: Managerial Accounting and Cost Concepts
yu yu yu yu yu yu
Chapter Two: Job-Order Costing: Calculating Unit Product Costs
yu yu yu yu yu yu yu
Chapter Three: Job-Order Costing: Cost Flows and External Reporting
yu yu yu yu yu yu yu yu
Chapter Four: Process Costing
yu yu yu
Chapter Five: Cost-Volume-Profit Relationships
yu yu yu
Chapter Six: Variable Costing and Segment Reporting: Tools for Management
yu yu yu yu yu yu yu yu yu
Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
yu yu yu yu yu yu yu yu yu
Chapter Eight: Master Budgeting
yu yu yu
Chapter Nine: Flexible Budgets and Performance Analysis
yu yu yu yu yu yu
Chapter Ten: Standard Costs and Variances
yu yu yu yu yu
Chapter Eleven: Responsibility Accounting Systems
yu yu yu yu
Chapter Twelve: Strategic Performance Measurement
yu yu yu yu
Chapter Thirteen: Differential Analysis: The Key to Decision Making
yu yu yu yu yu yu yu yu
Chapter Fourteen: Capital Budgeting Decisions
yu yu yu yu
Chapter Fifteen: Statement of Cash Flows
yu yu yu yu yu
Chapter Sixteen: Financial Statement Analysis
yu yu yu yu
,Chapter 1 yu
Managerial Accounting and Cost Concepts yu yu yu yu
Questions
1-1 The three major types of product costs yu yu yu yu yu yu yu 1-4
in a manufacturing company are direct materia
yu yu yu yu yu yu a. Variable cost: The variable cost per unit is yu yu yu yu yu yu yu yu
ls, direct labor, and manufacturing overhead.
yu yu yu yu yu constant, but total variable cost changes in yu yu yu yu yu yu yu
direct proportion to changes in volume.
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1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part of a yu yu yu yu yu yu yu yu within the relevant range. The average fixed
yu yu yu yu yu yu yu
finished product and their costs can be convenyu yu yu yu yu yu yu cost per unit varies inversely with changes
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iently traced to it. yu yu yu in volume. yu
b. Indirect materials are generally small ite yu yu yu yu yu c. Mixed cost: A mixed cost contains both
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ms of material such as glue and nails. They may
yu yu yu yu yu yu yu yu yu y variable and fixed cost elements. yu yu yu yu
ube an integral part of a finished product but their
yu yu yu yu yu yu yu yu yu
costs can be traced to the product only at great
yu yu yu yu yu yu yu yu yu yu 1-5
cost or inconvenience.
yu yu yu a. Unit fixed costs decrease as the activity level
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c. Direct labor consists of labor costs that yu yu yu yu yu yu yu increases.
can be easily traced to particular products.
yu yu yu yu yu yu b. Unit variable costs remain constant as the
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Direct labor is also called ―touch labor.‖
yu yu yu yu yu yu activity level increases. yu yu
d. Indirect labor consists of the labor costs yu yu yu yu yu yu y c. Total fixed costs remain constant as the
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uof janitors, supervisors, materials handlers, and
yu yu yu yu yu y activity level increases. yu yu
uother factory workers that cannot be convenie
yu yu yu yu yu yu d. Total variable costs increase as the activity
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ntly traced to particular products. These labor
yu yu yu yu yu yu yu level increases. yu
costs are incurred to support production, but t
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he workers involved do not directly work on th
yu yu yu yu yu yu yu yu 1-6
e product.
yu a. Cost behavior: Cost behavior refers to the
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e. Manufacturing overhead includes all man yu yu yu yu way in which costs change in response to
yu yu yu yu yu yu yu yu
ufacturing costs except direct materials and dire yu yu yu yu yu yu changes in a measure of activity such as s yu yu yu yu yu yu yu yu
ct labor. Consequently, manufacturing overhead
yu yu yu yu ales volume, production volume, or orders p
yu yu yu yu yu yu
includes indirect materials and indirect labor as
yu yu yu yu yu yu yu yu rocessed.
well as other manufacturing costs.
yu yu yu yu b. Relevant range: The relevant range is the yu yu yu yu yu yu y
range of activity within which assumptions
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1-3 about variable and fixed cost behavior are
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A product cost is any cost involved in p yu yu yu yu yu yu yu yu valid.
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urchasing or manufacturing goods. In the case yu yu yu yu yu yu yu
of manufactured goods, these costs consist of d
yu yu yu yu yu yu yu 1-7 An activity base is a measure of wha
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irect materials, direct labor, and manufacturing o
yu yu yu yu yu yu tever causes the incurrence of a variable cost
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verhead. A period cost is a cost that is taken dir yu yu yu yu yu yu yu yu yu yu . Examples of activity bases include units pro
yu yu yu yu yu yu yu
ectly to the income statement as an expense in
yu yu yu yu yu yu yu yu yu duced, units sold, letters typed, beds in a ho
yu yu yu yu yu yu yu yu
the period in which it is incurred.
yu yu yu yu yu yu spital, meals served in a cafe, service calls m
yu yu yu yu yu yu yu yu
ade, etc.
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1-8 The linear assumption is reasonably vali
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, d providing that the cost formula is used only w
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ithin the relevant range.
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